TNAG-1622-FCO40-2236-Relations-between-Hong-Kong-and-China-1987 — Page 162

B.

15.

CONFIDENTIAL

the development of representative government before

1997 could cause a collapse of confidence and damage

other aspects of Sino-British relations.

II.

Internal Political

China's internal stability cannot be assured. New

tensions might build up which could pose an eventual

threat to reformist economic and political policies.

III.

External Political

The Soviet leadership will continue to be concerned

over the improving relationship between Western

Governments and the Chinese, particularly in the field

of defence sales and will work to discourage its

further development.

IV.

Economic

In common with all China's trading partners, the UK

could face problems in trading with China if the

Chinese over-borrow, cannot export enough, or want us

to take more sensitive items under quota than we are

ready to contemplate.

OPPORTUNITIES

I.

Hong Kong

The signing, in 1984, of the Joint Declaration on the

question of Hong Kong provides the opportunity to

withdraw from Hong Kong with good prospects for the

future stability and prosperity of the Territory and

has opened the way for the development of warmer

relations and co-operation in other areas of mutual

PROAAJ